Much has been written about the EV incentive program in latter years. Briefly, many jurisdictions offer EV subsidies lowering the cost of a new (or in some cases used) EV’s. Here in Canada, Quebec (which has them) has four times the EV sales ratio vs Ontario (which does not have them). These incentives do nudge a lot of people into EV’s which stimulates development of charging infrastructure, helps automakers justify their investment in EV manufacturing capability. Critics point out that it mostly benefits people that have the financial means to spend at least 40 000$ on a new car. Further as we shall see, on a per tonne of CO2 basis, EV incentives make for a relatively expensive offset program. Despite these deficiencies, there are good reasons to run an EV incentive program, particularly in Ontario where the auto-sector is a large employer.
Seen as a “carbon-offset-program” how much do these incentives cost on a per-tonne of CO2 saved?. The average car will emit around 4.6 tonnes of CO2 per year, ( source) for a life-time of 12.88 years ( source). That adds up to about 60 tonne’s of CO2. Quebec offers a 8 000$ rebate, added to a 5 000$ federal one, seems you pay 13 000 CAD in EV incentives to save 60 tonne’s of CO2. Thus on a per tonne of CO2 basis we arrive at 216 $ per tonne of CO2.
Most commercial CO2 offset programs rely at least in part, on planting tree’s, so how much does that cost on a per tonne of CO2 saved basis? Tree Canada in their annual report spent about 5M$ to plant 400 000 trees, or $10 per tree. That tree will absorb about a tonne of CO2 in its lifetime, so planting trees is then $10 per tonne of CO2? Not so fast, after all Tree Canada is a volunteer driven organization and I greatly enjoyed a recent event in the GTA where I spent a lovely morning planting trees (and meeting a group of wonderful people as I did so). If they had to pay me to plant these tree’s, costs would have been higher. Higher still, if one would have had to purchase the land the tree sits on. Using statistics for average land value per acre of farmland, and how many tree’s we can fit per acre, this increases the cost to $16 per tree. Paying someone to do the planting, lets round it up to $20 per tree. If we were to scale up our tree-planting operation significantly, there would undoubtedly be some additional costs (land value would perhaps increase), so lets increase this figure by a whopping 2x, so per tree at an all in $40 per tree planted and that tonne of CO2 absorbed. Thus, we arrive at a figure of $40 per tonne of CO2 for the trees.
So, as an offset program, seems EV’s are an expensive way to go about it? $216 per tonne of CO2 compared to (an inflated yes) $40 per tonne for tree-planting? But there is a lot more to the story, both from the standpoint of the consumer shopping fro an EV, as well as the auto-industry that needs to spend trillions on electrification.
EV availability is another point. To be fair, EV incentives is not the only variable here, Quebec and British Columbia both require automakers to sell a certain portion of EV’s (source). If an automaker has a choice to send an EV to Ontario or British Columbia, BC winds up winning every time. As an example of this, a recent (February 2022) search for new Nissan Leaf’s revealed only 3 in all of Canada, all of these for sale in BC.
Ontario has a sizable auto-industry. It is responsible for 13 % of all cars made in North America ( source). Make no mistake about it, plants compete fiercely for investment from the automaker’s. Without those investments, plants gradually become obsolete, unable to compete and close. Almost all of the 1M vehicles Tesla made in 2021 (source), came out of only two plants (Fremont CA and Shanghai China source). Without continuing investments in auto-plants, its easy to see Ontario’s auto-industry entering a slow decline as obsolete plants close.
In summary, treating EV’s as an CO2 offset program misses much of the point, as the auto-industry needs to spend billions if not trillions of dollars on electrification. Nissan spent about 5 Billion just to bring the Nisan Leaf to market back in 2011 (source). It stands to reason that once all the different automakers have electrified all their different models, trillions of dollars have been spent. By helping the automakers now, we ensure that the Ontario auto-industry remains strong in what appears will be an electrified future.
Electric car adventures 